13 Tips for Investing in Bitcoin and Other Cryptocurrencies

I’m not a cryptocurrency expert. If I were to rate my knowledge of crypto from 0 to 100, I’d give it about a 3. But since most people are at about 0.2, that means I’m 15 times smarter than you about the topic and, even though I barely understand how the shit works, I’m justified in giving advice.

It’s not what you know, but how much you can pretend to know when talking to people who know even less than you. That’s how sales work nowadays, right?

The purpose of this post isn’t to act like I’m a crypto savant—I am straight up telling you I’m a donkey on the subject—nor is it to give you a bunch of basic instructions on how to buy Bitcoin, Ethereum, or anything else. You can find both know-it-alls and generic how-to guides all over the internet.

Instead, I thought it would be cool to share a few things I’ve learned thus far in my dive into cryptocurrency—most of which are more trading/market-centric than specific to crypto—and maybe clear up a few misconceptions.

 

Learn to buy and properly store major coins before trading.

If you listen to The Three Donkeys podcast, you hear Peter Jennings, Adam Levitan, and I tell stories about trading ridiculous cryptocurrencies like Titcoin, or the time I owned a huge percentage of Vegas’s strip club currency (not to brag).

And so my initial piece of advice here might surprise you: don’t get into crypto so you can buy up coins whose primary purpose is to make it easier to get a lap dance. “Now wait, I’m supposed to swipe this where?!

This post isn’t meant to walk you through how to buy and store crypto or go into depth about the various exchanges and wallets because there’s a mountain of content out there already, but I’ll give you a few reputable sites/tools to help you out. There’s a lot of good stuff out there, so this is just a shortlist to get you started…

Coinbase

  • Simple to use
  • Beginner-friendly place to start buying BTC, ETH, BCH, or LTC

Kucoin.com

  • Ability to trade cryptocurrency
  • Beginner-friendly
  • Lots of bonuses and giveaways

Changelly

  • Must already own cryptocurrency to use
  • Allows trading of currency pairs you cannot trade elsewhere
  • Easy-to-use exchange that searches for best rates at other sites for you

Trezor

  • High-security hard wallet on which you can and should store coins you plan to hold
  • Safer than keeping coins on an exchange

There are a variety of other sites and exchanges out there, but there’s really no reason to be trading Einsteinium on an advanced exchange until you learn how to purchase currencies and store them on a hard wallet.

I’d start by learning how to purchase Bitcoin on CEX.IO or a comparable site and send anything you don’t plan to trade to a Trezor or another hard wallet (Ledger is another good one).

A couple tips: use a bank transfer to purchase crypto (lower fees than a credit card) and make sure you enable two-factor authentication on any site you use.

If you want to learn more about crypto basics, check out this collection of resources.

 

Don’t diversify for the sake of it.

This is going to be pretty unpopular advice. All over the internet, you’ll find people telling you to not put all of your eggs in one basket. This is true for pretty much every type of investment. It’s certainly true in sports speculation; DFS players are told to diversify their player exposure and sports bettors to hedge their bets.

I don’t believe this is smart. The only reason you should diversify is to be able to invest more money, overcoming a lower ROI with more volume to see greater long-term gains.

I’ll use DFS as an example since that’s my expertise. If you think Michael Thomas is the top wide receiver play this week, you should have as much money on Thomas as you’re willing to stomach. It’s high-variance to not diversify, which is why people avoid it—it feels shitty to have large swings—but it will lead to the greatest ROI over the long run (if you’re right).

So why not put Thomas in every lineup? Well, you’re always trying to balance the highest possible ROI—which zero diversification allows for—with the greatest overall profit and the lowest possible risk of ruin (going busto). If you were to seek the highest ROI and greatest profit, you’d not diversify at all and play 100% of your bankroll, which would of course be idiotic since your long-term risk of ruin would be 100%.

As it relates to crypto, I’m of the opinion that you should identify what you believe is the best value, then invest as much money as you’re willing to lose in that single asset. Then, knowing that adding another coin—diversifying—can slightly reduce your risk of ruin, put as much money as you can stomach into that (which should be a lower amount).

In this way, you’re diversifying solely to be able to invest more money, increasing your profit and reducing your risk of ruin.

Okay, now two caveats. The first is that the swings in crypto are bananas. If you haven’t woken up to 35% of your investment just—poof—gone, you haven’t lived my friend. And so with that greater volatility comes more of a reason to hedge.

The second caveat is that it’s more difficult to know what’s “optimal” in cryptocurrency than in other alternative investments. Although I might be off a bit here and there, I pretty much know the top values—or a small pool of players who could be considered the top values—in DFS. It’s somewhat obvious. That’s probably not true in crypto—certainly not to the same extent and especially not for someone like me who doesn’t know what the hell he’s doing.

If you believe in the overarching concept and believe the entire cryptocurrency market cap will rise, there’s an incentive to just stay in the game, meaning it’s probably wise to diversify more here than in more “solved” games like DFS.

Nonetheless, I think something like a 60/25/10/5 type of split is better than putting 5% of your cash into 20 different coins.

 

Market cap matters more than coin price.

A friend of mine saw that I had some early trading success—mostly just the result of a bull market for altcoins and a few lucky moves—and asked if he could give me some money to invest. I agreed, and so he’s become interested in the space and has his own suggestions of trades to make. In the beginning, those were often, “We should get XYZ because it’s under $1.”

This is the most common mistake I see made by those new to crypto. The price of coins is relevant only after accounting for the circulating supply. The number of coins multiplied by the price of those coins is the total market cap for the token, and that’s what really matters. When you buy any coin, what you should really be focused on isn’t the price of the coin, but what percentage of that total market cap you’re purchasing.

As an example of the difference, take a look at the top six coins in terms of market cap (specifically Ripple), via CoinMarketCap.com:

At the time of writing this, Ripple costs 23 cents—nearly 300 times less than Litecoin and 1,800 times less than Dash. Nonetheless, because of the way in which Ripple operates, there’s a much larger circulating supply, and thus the market cap of Ripple is over twice as large as Litecoin and Dash.

On the flip side, I can’t tell you how many people I know have said, “I’m not buying Bitcoin right now. If I invest $5,000, I can’t even get a whole token.”

But who cares? If the market cap of Bitcoin increases by 20%, someone investing $5,000 will have made $1,000 in the same way that they’d make $1,000 if Ripple increases 20%. Yes, it could be easier for certain coins to see massive swings in value, but that would be due to their market cap and not the coin price. It’s more difficult for Ripple (nearly $9b market cap) to go from 23 cents to 46 cents than for a coin with a $100 million market cap to double in price (regardless of the cost of one token).

The point is that the price is effectively arbitrary based on the circulating supply of tokens. If there were theoretically just one circulating Bitcoin that cost $130b+, it wouldn’t change the merits of your $5,000 investment in it.

Don’t get hung up on the absolute price.

 

Don’t take profits unless there’s a change in circumstances.

I got a hotel in NYC a couple weeks ago and planned to go up for the day. When that day came, I just didn’t feel like going anymore, so I didn’t. The fact I paid for the hotel meant nothing—it was a sunk cost and that money was gone—and so the only relevant factor was really whether or not I felt like going to NYC that day.

Don’t let past decisions affect future ones if they have no bearing on your happiness (or, in investing, your expected value). With any investment, it’s irrelevant whether or not you’re up or down or you’ve removed your initial investment or you’ve run it up 10x or whatever. I can’t tell you how many times I’ve been talking with my mom about crypto and she has said, “You should take out some of the money you’ve made.”

There are really only a couple reasons you should be taking profits, all of which are the result of something changing. One would be that your net worth has shifted and you’re over-exposed to crypto. As an example, let’s say you bought Bitcoin at $1k with $50k in the bank, and you think it’s smart to have 20% of your money in BTC (so you bought $10k of it). If the price of BTC is now $8k and you didn’t sell, your BTC would be worth $80k. Assuming your net worth otherwise didn’t grow, you’d have $80k in BTC and $40k in cash. Even if holding is +EV, it might be too much risk for you to stomach, in which case you’d be justified in taking money out.

Of course, if you think the future of crypto has changed for the worse—or that your money could be better invested elsewhere—then you’d also be justified in changing your allocation.

Finally, although it’s admittedly irrational, I think you could make an argument for removing your initial investment solely for peace of mind. If you invested $1k in crypto and have run it up to $10k, removing the initial $1k isn’t the worst idea if you think it will help you psychologically. A lot of people think and act differently when they’re on a freeroll; just look at how people act in casinos when they’re “playing with house money.” If it is comforting to you think “the worst that can happen is I’m back to even,” then removing a small portion of your crypto funds so you’re on a freeroll is probably fine. It’s not mathematically the right decision, but you can potentially make up for the loss in EV from just having peace of mind that you’ll never be down from your investment.

 

The goal isn’t to be right as often as possible.

The goal is to make as much money as possible. I’d rather be right 10% of the time but see 100x returns when I hit than to be correct 80% of the time and see 2x returns. Being right is comforting, but finding disproportionate payoffs on events others are overlooking makes you more money. This is related to antifragility—a concept I talked about in my post on why I bet on Trump to win the presidency.

 

Crypto worth should be measured against both USD and BTC.

Let’s say the current prices (in USD) of Ethereum and Bitcoin are $350 and $7,000, respectively (meaning one BTC is 20x more valuable than one ETH in terms of dollars). If the price of BTC rises to $7,350 and ETH stays the same at $350, the latter coin will show just under a 5% decline in value when compared to BTC. In terms of your purchasing power if you were to convert your ETH to USD, nothing really changed, even though the ETH/BTC rate got worse.

So did ETH decline in value? Yes and no.

Although you still have the same amount of money (in USD), you should still care about how other cryptocurrencies compare to BTC because, long-term, you should be making trades that increase your overall BTC value. That doesn’t mean you need to hold exclusively BTC, but your goal should always be to improve the overall value of your crypto portfolio in terms of BTC. If you’re not increasing that number—even if the dollar value of your holdings is increasing—it means you’d be better off just buying and holding BTC (which might be the right move for many).

 

Buy Low and Sell High?

Well, yes, duh, you should always be looking to buy low and sell high. However, I’m of the opinion that it’s much, much tougher to recognize peaks and valleys in cryptocurrency since the market is so much different—and likely irrational—than something like the stock market. Given that so much of the value is speculative, short-term price fluctuations—especially for many altcoins—are more so a reflection of hype than underlying value.

As an example, let me tell you a little story about a coin called SAFEX. I bought a decent amount of it in early August. Why? I don’t even fucking remember. It was probably awful reasoning.

A few days later, I went golfing with some friends. I shot 54 on a nine-hole Par 3 course, by the way, even though I used three balls and wrote down the best score on each hole. I’m no Kim Jong.

We started golfing at like 10am and by the time we finished at around noon, SAFEX had skyrocketed like 4x or something crazy. Why? No idea. Had I checked in halfway through that rise, I probably would have “sold high” and missed out on a lot of money.

This has happened in the opposite direction, too; when China banned ICOs, I bought a bunch of BTC after it had dropped quite a bit…only to see it decrease like 20% more.

Anyway, my point is that trying to time trades over small windows of time is very challenging. I’m all for buying and selling based on hype, but don’t get cocky in thinking you can identify highs and lows.

 

Buy now.

Related to this idea is your strategy for timing your buys. I’ve seen a lot of advice that looks something like this…

Again, I think recognizing the bottom of dips when they’re happening is much more difficult than people think. Either way, the only reason you should ever be waiting to invest in any coin that you think will appreciate long-term is if you think there will be a short-term dip. Otherwise, if you think it’s a good investment, you should be buying as much as you can possibly stomach right now. If your portfolio changes and you want to purchase more in the future, you should again buy as much as you can take on then, too. It doesn’t make sense to invest at regular intervals unless that’s all you can afford to put in each time.

If you look at the graph above, yes, you’d be slightly better off buying at those dips than the peaks that came before them. But you’d be much better off if you just put all the money in from the start. Hell, you could completely miscalculate the timing and invest all of it at the first peak and still come away much better off than saving money to buy dips.

If you’re bullish on a crypto, the only reason to wait on investing everything you can is if you think there’s a short-term drop in store.

 

Buy early, sell early.

The best approach with BTC, if you believe in its long-term outlook, is to buy, hold, and don’t worry about short-term fluctuations in value. If you you’re actively trading coins you don’t plan to hold “forever,” however, you obviously need to have some sort of strategy with when you plan to buy and sell.

“Buy the rumor, sell the news” is a popular phrase in trading. One example of how I fucked that up is with Legends—that token I referred to that you can use in certain Vegas strip clubs. I had seen some data on the value of LGD increasing prior to big boxing matches in Vegas, so I bought a bunch a couple weeks prior to the last Mayweather fight.

Was that smart? I have no idea what the “true” value of LGD might be, but I did know there was some buzz beginning to pick up on Reddit about how it would increase as the fight approached. In that instance, I didn’t really care too much about what LGD was “worth” in some absolute sense—just what other people would think about it short-term. I bought it at around $1.50 and it was above $4.00 at one point.

An important part of this, of course, would be figuring out when to unload it, unless you find it prudent to be a long-term holder of a strip club currency. And hey, I don’t know your life habits, maybe it is.

For whatever reason, I decided to sell a little bit of LGD the morning of the fight—which was smart—and hold onto the rest. I don’t know what I thought was going to happen—that it would soar that night?—but it started to tank that afternoon and night as those speculating on it began to unload. I was at the DraftKings MLB Championship and not really paying close attention, which—and this is unfathomable—ended up being a #badidea. Turns out when you’re hoarding strip club tokens you think are going to plummet in value in a matter of hours, you do want to be paying attention to what the fuck is going on.

Anyway, in most cases with coins like LGD, it’s better to unload too early than too late if you think their current value is highly inflated due to hype. Even if you believe there’s a chance for more gains, at a certain point, the upside is certainly not worth the risk.

You can be greedy, but don’t get too greedy.

 

A few other random tips I am going to list but don’t have time to talk about at length…

  • If you’re unsure if you should make a trade, don’t.

You should have a good enough reason to buy, sell, or trade that you’re confident you need to do it.

  • There’s no single portfolio allocation right for everyone.

This is dictated by your bankroll, risk tolerance, and available time, among other things.

  • Know how coin types and correlations affect your volatility.

Certain coins tend to move in unison, while others are negatively correlated.

  • Keep your emotions in check.

This is incredibly important. You’ll almost always feel overconfident after a good trade and like a moron after a bad one. That’s natural. Don’t let it affect your decisions. Most of what’s perceived as skill (or a lack thereof) is just randomness.

Okay, I’m gonna go eat now. My next post will be a follow-up to my article 40 Counterintuitive Tips for Building a Business.

40 Counterintuitive Tips for Building a Business

I have a little bio on the landing page of this site. Here’s part of it:

Who cares where I went to school or what’s on my resume? I also don’t want to reveal the fact that I’ve never had a real job, because that would make me look #inexperienced—unless you consider the following things I did to be jobs: tried to become a famous artist, sold a lot of stuff on eBay (including my soul, which I think I still have because eBay removed the listing), bought a whole bunch of glass after receiving horrible advice from my grandfather to “buy all the glass you can get your hands on, trust me,” became a magician, bought an acre of swampland in Louisiana for the investment potential, became a competitive eater (retired three hot dogs in), and started a few other businesses I’ve been advised by my lawyer to not even talk about. Talk about a fucking resume.

So if you’ve arrived at this post and you’re asking why I’m qualified to talk about building a business, there’s your answer. They say the greatest entrepreneurs are the ones who fail the most—idk who ‘they’ are or if anyone actually says that, but it seems like it could be true—and so I’m more qualified than anyone to talk about this stuff because almost everything I’ve ever done has been a colossal failure.

You don’t know business until you’re knocking on strangers’ doors at 5am to convince them to sell you their glass…or working on inventing new card tricks as a career move…or marketing yourself as a famous artist halfway through your first ever oil painting…or trying to sell a plot of land in a fucking swamp you’ve never visited.

Now that I’ve established ultimate credibility, you’re probably very interested in learning from me. “Look at his history of failure! He must be an amazing entrepreneur with all those fuck-ups,” you’re likely saying to yourself. Really though, I’ve learned so much over the years by messing up. Figuring out what not to do is sometimes the most valuable information you can gather.

I was initially going to title this post “Tips for Building a Business,” but as I jotted down some thoughts, I realized that pretty much everything I was writing was the opposite of how you’re “supposed” to do things. My typical day is evidence of that. Everyone is taught the same sort of stuff for how to “succeed” in life or make money or start a business, and for the most part, we just blindly accept it even though 1) the advice sucks ass and 2) there’s inherent value in doing things differently.

So my list of ways to succeed in business (even if you aren’t self-employed or an entrepreneur) is for the contrarians out there who don’t want to follow the rules.

 

Do stuff.

“Fuck, I gave this guy the benefit of the doubt after reading through that shitty intro and his first tip is to do stuff.”

Every time I see how most businesses operate, I’m dumbfounded by how much time is spent either working on meaningless stuff or not working at all. The truth is most people prioritize feeling like they’re accomplishing things over actually being productive.

When in doubt about how to proceed, do actual work related to improving the core part of your business. Stop with the phone calls and aesthetics of your logo and monitoring Twitter every 30 seconds. You’ll have the most success focusing on a few items you know will have a major positive impact.

 

Get distracted.

It’s okay to go off on a tangent.

In a recent FantasyLabs podcast, DFS player BeepImaJeep (Jay Raynor) talked about how he’s trying to find buried treasure in the Rockies. No really, he’s leaving this month to try to find this treasure.

Jay was the main subject of the Dan Barbarisi book on DFS—Dueling with Kings—and I recently saw Dan and we started talking about Jay’s quest for this treasure. Dan mentioned Jay will sometimes go down a rabbit hole researching something, and many times it ends up being fruitless and feels like wasted effort. But sometimes it’s not, and Jay’s tendency to get “distracted” in the right way is why I think the kid is going to find $2 million dollars of buried treasure.

You’re going to have ordinary results if you have a conventional process. Give yourself freedom to be creative, even if it doesn’t always lead to short-term results.

No one ever found treasure in the middle of a popular trail; it’s hidden in the areas yet to be explored.

 

Don’t plan much.

It’s good to have a vision, but excessive planning ends up being inefficient because 1) things change and you need to adapt, and 2) you want to be nimble with no unnecessary hurdles that could jeopardize your ability to switch course.

 

Quit.

You’re going to have lots of bad ideas. Most of your ideas are probably awful. Mine are. Give up on them. Don’t see them through. It’s a waste. For the most part, when an idea is a winner, you know it pretty quickly. Whether it’s a single feature of your business or the entire concept, if it isn’t working early, you shouldn’t actually stick with it unless there are additional signs it will improve.

They say you should quit while you’re ahead, but you should also quit while you’re down only a little (money, time, energy). Quitters win.

 

Collect emails before making money.

If you’re starting a business and unsure of where to start, spend time finding creative ways to get emails from your target audience. There’s everlasting value in those emails as a primary avenue of communication with potential customers.

 

Don’t save money.

You should save money until you have some safety—whether it’s operating capital for a business or just cash in the bank personally. After that, saving money is for suckers, in my opinion. No one gets rich by saving money; they get rich by making more money. I think that’s really, really important, so I’m going to repeat it: if you want to get rich, figure out ways to make a lot more money. Seems obvious, right? Invest in yourself and your business and don’t hoard money unless it’s part of a long-term play to make more money.

 

Don’t work on cultivating your “brand.”

Just be yourself and if people like and connect with it, that’s great.

 

Don’t be a good boss.

Don’t be a boss at all. Be a leader. The best leadership comes when people don’t even know they’re being led.

 

Don’t always compete.

I hate to lose. Hate it. Any success I’ve had stems from wanting to crush anyone who thinks they can do something better than me to the point that they’re demoralized and give up.

But you have to know when it’s smart to compete. If you focus too much on winning, it’s easy to forget that what you should really be doing is making new rules for how the game should be played.

 

Don’t listen to customers.

Just kidding. Sort of.

You should listen to your customers at times when it comes to small features. If an aspect of your product/service is “off,” they can tell you that.

But, there are other good reasons to not listen to customers (and, generally speaking, I think you should ignore them more than you listen).

One reason is because the types of customers who speak up generally aren’t representative of all customers. At FantasyLabs, a disproportionate amount of our support is provided to free users. Some of them pay us nothing, have no intention of ever paying us a dime, and bitch about literally everything they could possibly bitch about. It’s bananas. At the other end, you have super hardcore users who might want very advanced features that could be cool, but won’t really help the business.

Another reason is because most people don’t actually know what they want or need. If we listened to customers, we never would have built Player Models, which was a totally unique concept. You can and should adjust minor things you’re doing based on customer feedback, but don’t just build out everything customers say they want because they’ll typically just give you minor variations of things that already exist.

 

Take lots of risks.

Don’t take risks for the sake of it, but generally, most value comes when you’re not afraid to take on risks others are avoiding.

SUCCESS Magazine did a story on risk with a really, really, really ridiculously good-looking male model as the subject.

 

Don’t optimize your day.

You should be striving to be as efficient as possible, but who says it needs to be done over the course of 24 hours? If you’re trying to help your business as much as possible in any particular day, you couldn’t do anything that provides long-term benefits.

I wrote about this concept in my post on working for free:

The merits of working for free change based on your timeline. I’m a big believer in the long game. I think most people optimize for right now and it’s +EV simply to make decisions based on what’s most beneficial down the line.

Simple examples: reading, sleeping well, and working out. All stupid uses of time if your goal is to optimize your day, but all some of the most vital aspects of creating long-term happiness/wealth/well-being. If the question is “How can I extract maximum value out today?” you probably shouldn’t work out, for example. It sucks ass. I’ve tried it. Not fun. But if the question is “How can I create the most value for myself (happiness, money, however you want to define ‘value’) in, say, 2019, then you should probably create a long-term foundation for success, with reading, working out, and getting rest being among the most +EV things you could possibly do.

In many ways, this is what we’re trying to do at FantasyLabs. Not just in creating long-term customers by providing a foundation for solutions instead of one-off “answers,” but also in terms of the basic philosophy and structure of the company (which uses a “freemium” model).

At FantasyLabs, we give so much away for free. Almost all content is free. Most of the tools are free. I love free. Are we maximizing revenue right now? No. Our subscription is quite underpriced (in my opinion), even though it’s among the highest in DFS. We don’t try to squeeze money out of people to artificially inflate monthly revenue. We’d rather give away too much for free than too little because “too much” really doesn’t exist if you have “the longest view in the room,” as Sam Hinkie said.

Fundamentally, I think we’re all trying to strike a balance between maximizing money/value/happiness right now versus creating a sustainable foundation for long-term value generation. At one end, working for free makes no sense. At the other, you should work for free all the time because it provides value to the maximum number of people.

The optimal balance, then, is completely dependent on time—for when you’re trying to optimize.

Think about how to build the best possible business in five years. Do things that will lead to that result.

 

Work for free.

Speaking of working for free…here’s the full post.

 

Think about how you’re supposed to do things…and then say “fuck that.”

It’s okay to act in a conventional way at times. Sometimes it’s faster and, especially in non-competitive situations, there’s no downside to doing things like others do them.

But in the same way you shouldn’t be contrarian for the sake of it, you shouldn’t follow all the rules for the sake of it, either. And if you’re not sure which direction is right, chances are it’s the one others don’t pursue because it makes them uncomfortable.

 

Don’t start a business in the real world.

I’m biased, but I prefer online businesses as opposed to those out there in the “real world.” First, it’s scary out there. You have to leave the house. You have to talk to people. No thanks. Second, you can track everything online. And third, it’s easier to scale, say, an online boutique as compared to a physical one.

 

Bet on yourself.

I like prop bets like these. Anything that gives you an incentive (with personal downside) to accomplish your goals.

 

Don’t advertise.

Not advertising seems pretty extreme, but what I really mean is you should sell not by buying traditional ads and being blatantly obvious you’re advertising, but rather by genuinely helping people and becoming trustworthy within your space.

Don’t buy ad space on a website. Do a guest post.

Don’t purchase social ads. Become a valuable follow for your target audience.

Don’t advertise via someone else’s email list. Build your own by giving people things they want.

Don’t tell someone why they should give you money. Show them by writing a minimum of 19 books.

Show people how you can help them by actually doing it instead of just shouting it at them.

 

Skip meetings.

I mentioned this one earlier, but I think it’s really important. Meetings suck. They’re almost never worth the time. Communicate via email—where everything is tracked and can be viewed at any time—and hold meetings only when absolutely essential.

Related: FantasyLabs uses Slack and Sprintly for communication and project tracking.

 

Read and write.

Here’s a list of some books I like. Reading is time-consuming, but perhaps the most beneficial thing you can do long-term. When you read a great book, it can fundamentally change how you think about the world and solve problems.

Reading also leads to better writing, which I think is an undervalued asset for pretty much anyone who needs to communicate via email. Clear writing is a sign of clear thinking.

Side note: I was thinking about writing a book on how to communicate effectively via email to get whatever it is you want. Who’d buy it?

 

Don’t be second-best.

Being No. 2 is really bad because you’re in a really tough spot with pricing. I’m really interested in pricing psychology and there’s a ton of evidence that people really have no idea what most stuff is “worth”—it’s completely relative—and they mostly base their decision off of certain cues or anchors.

Well, if you’re second-best and the top company charges, say, $100 for whatever it is they’re selling, you can’t get too close to that price because customers will then have an apples-to-apples decision of which product/service to choose. If you’re No. 1, however, you set the going rate for what something “should” cost.

Plus, you should be building the best thing you can anyway and shouldn’t be satisfied being No. 2 just because who the hell wants that?

 

Charge more money.

I’ve learned this lesson through experience. It’s much easier to come down in price than it is to go up. Once you set the expectation of what something is worth, good luck trying to get people to pay more.

 

Don’t be balanced.

I’ve already written about balance and why I hate it.

 

Don’t multi-task.

Do one thing at a time and focus all of your attention on that one specific thing. Then take a break. Focus on something else and put all your energy into that. Take another break. Trying to solve multiple problems at once leads to solving none.

 

Don’t worry about competitors.

While you shouldn’t be naïve to real competition, don’t worry too much about what others are doing. If you’re focused on unique solutions and being as innovative as possible, it really won’t matter what anyone else is doing. FWIW, this is probably truer for small businesses than like McDonald’s or something. So if the CEO of Ford is reading this for pointers, I apologize for the poor advice, Mark.

 

Don’t work long hours.

Working 12-hour days is fine at times, but those who brag about working ridiculous hours are either not working very productively (most likely) or going to burn out. I’m a big believer in working intensely for shorter durations—“sprints”—and the timing of those should be fluid based on when you’re in a “flow state” of intense hyperfocus. Not only do I think this is best long-term, but I also think you only have so much energy to give over a specific period of time such that extended periods of truly efficient, productive work are impossible.

Show me someone working non-stop at peak efficiency for an entire day and I’ll show you someone on Adderall.

Also, take Adderall. (That’s a joke.)

 

Don’t read resumes.

Read the email they send and how (or if) they sell themselves in it.

 

Overcompensate employees.

In the same way optimizing for today leads to sub-par long-term results, underpaying employees is a poor long-term strategy. You’ll more than make your money back by ensuring employees are happy, feel fulfilled, have creative freedom, and have upside in the future.

 

Find complementary pieces.

There are certain things I do well, and other things at which I’m terrible. While I’ve naturally improved some of my weaknesses over the years, the smartest thing I did was find a business partner—CSURAM88—who complements my skill set and fills in the gaps. The areas in which I naturally struggle—verbal communication, networking, building relationships—are where Peter kills it. Similarly, the other founders at FantasyLabs are complementary to me and one another, and so my only objective is to just not terribly fuck up the whole dynamic.

You should certainly patch up your weaknesses so they aren’t huge leaks, but sometimes the best way to do that is with the right teammate so you can focus on making your strengths that much better. Again, trying to manufacture personal balance when it isn’t there typically won’t help you as much as being the absolute best in a couple areas and working hard to intensify and market those strengths. I don’t care what it is; if you’re the best in the world at it, you can make money and be successful.

 

Be selfish.

Be selfish, but as a means of helping others. You aren’t going to be a good leader, friend, relative, or whatever if you’re unhappy and unfulfilled.

 

Say no.

If you’re unsure of whether or not you should do something, don’t do it. Take only the most obvious offers—the no-brainer deals.

The exception to this is if you’re not in a position of power or have no leverage. If you have no credibility or you’re just starting in a particular niche, you should say yes a whole lot more often. At one time, I was writing for like 15 sites because I just said yes to anyone that offered me anything. That was bad for short-term income (I accepted any deal anyone offered…literally anything…they could have offered two bags of shit sent to my doorstep once a week and I would have politely asked for one bag of shit…or no now wait, three bags of shit? I don’t know which is better. Jesus this is going to be a long sentence.) and mental health, but a net positive for gaining credibility and setting a foundation for the future.

 

Don’t worry about money…kind of.

Money is good. I like money. You like money. Everyone likes money. I think I saw a study that money makes you happier up until a point (which was a fairly low annual income). I kind of buy that, but I also believe there’s probably a selection bias with the types of people who generally make a lot of money. Maybe they naturally aren’t happy. Maybe they pursue money for the wrong reasons and will thus never be happy no matter how much they have.

So I do think money makes you happier, but if your goal is to make a lot of money for the sake of it, it will probably be pretty hard to be content. If you want to make a lot of money as a vehicle for being free and doing more things that make you happy—traveling, entertainment, eating out, whatever you like—I think you’ll find more sustainability and fulfillment.

 

Get really lucky.

Most people you regard as “successful” probably got pretty lucky to be in their specific situation. Almost everyone I know who is crushing in business has a story of “if I didn’t meet this person…” or “this random choice was my big break.”

Usually, though, they got “lucky” to be in their particular role because they put themselves in a position in which they could get lucky in the first place. In daily fantasy sports, the best players always seem to get the luckiest because they’re consistently putting themselves in spots to benefit from randomness. The same is true in most pro sports drafts, with sharp teams generally acquiring more picks and giving themselves more ways to get lucky.

And so the easiest way to get lucky is to take a lot of shots. If something is failing, give up quickly and do something else. You only need to hit one time.

 

Ignore advice from almost everyone.

Do your own thing and figure it out on your own. Don’t pass up advice from obviously high-quality sources of knowledge—it’s not like I’m ignoring Mark Cuban’s emails—but the majority of people aren’t going to know better than you how to control your business or life. If you make a mistake, who fucking cares? Just learn from it and move on to the next thing.

 

Don’t raise money.

Yes, FantasyLabs raised money from Cuban, but we didn’t necessarily “need” it and the move was all about the strategic partnership; there is no better investor we could ever have.

Otherwise, don’t take money until it’s absolutely essential. There are obvious companies that need money to scale—DraftKings, Uber, etc.—but, especially early, you should be trying to hold onto as much equity as possible by doing everything you can possibly do on your own.

Also, there’s value in having total control and not needing to answer to anyone. If you want money to be free and raising money could lead to feeling caged in or creatively restricted, then what’s the point?

 

Write a book, but don’t worry about sales.

Books are the most effective marketing tool I know of.

 

Don’t take your time.

Entrepreneurs can’t be perfectionists. Work quickly, test things, and put more resources into the things that work. You never want to work so much on something that you hit the point of diminishing returns with a losing idea. Take your time only when you know you or your company will benefit in accordance with your level of attention to the details.

 

Don’t always do what you love.

Sometimes, it’s okay to keep a hobby a hobby. Not everything is meant to be turned into a business and it’s pretty easy to lose your passion for something when your income is tied to it. I forget where I saw it but I recently read a quote that you should do one thing in your life that makes you money, one thing about which you’re very passionate, and one thing that keeps you healthy. If your goal of making money is to live a free life so you can do what makes you happy, don’t sacrifice the things you do that already give you that happiness.

 

Don’t talk about being an entrepreneur.

Unless you’re writing a blog post about it.

 

Build a business that doesn’t need you.

From the start, build a company that would operate just fine (or suffer as minimally as possible) if you were to disappear.

 

Don’t give a shit.

Perception is very much based upon expectations. One of the worst feelings as a DFS player is having massive equity in a tournament and then falling because you feel like you “lost” money. You could have a 10% ROI that feels like a huge win or a huge loss depending on your expectation.

If you lose those expectations, you become free. You can take more chances. Spend money more aggressively when needed. Hold more leverage in negotiations.

There’s a Taoist story about an archer who can hit a bullseye with every shot in practice, but crumbles under the pressure of competition. If you want to hit a bullseye, or get the job, or start a successful business, free yourself of expectations by negating the influence of external factors.

The guy who gets the girl is the one who doesn’t care if he gets her or not.

Should You Work for Free?

Back in college, I tracked every play in every Cowboys game and charted them into like 50 different categories: every motion, audible, pass length, formation, personnel, and so on. It took me like 10-15 hours to break down a game. I’d do it right when the game was available on Game Rewind, which was usually at like midnight.

Here’s a screenshot of a few plays:

Did I mention I’m a complete psychopath? Didn’t need to, didn’t need to, got it.

I had all this data that could theoretically be very useful to the team—and perhaps quite valuable for me—so I made the logical move and emailed the entire thing to everyone in the organization for free. I’m talking everyone: Garrett, Jerry, marketing interns, offensive tackle Marc Colombo, writers, social media managers, event coordinators, sales consultants, a homeless man who slept outside the stadium…everyone.

How did I get their emails? I figured out a way to get one of them through some completely normal and not at all creepy sleuthing, then could easily reverse engineer the rest of their email addresses using the same structure.

It’s called grinding, look it up.

Another brilliant idea I had at the time that my lawyer told me probably not to mention but I’m gonna anyway because yolo was a form of writing arbitrage. Basically, internet content was becoming king around that time and there were a bunch of sites that would pay freelance writers decent money to write short (and shit) articles. Remember eHow and About and those sites? Stuff like that.

They paid enough that I thought, “Man, this is too much money, I bet people would do it for less.” So they did do it for less, for me. I advertised my own company on Craigslist that paid writers very handsomely—and by that I mean about 50% of what I would be paid to write through another freelance publishing company at which they couldn’t be accepted—to create short articles, which I’d then publish under my name (with permission, of course…from the writers, not the company). $25 out, $50 in, and we’re off. That idea worked for a bit until the site contacted me wondering how I was writing 100 articles a day.

“I started drinking a new coffee,” I said. “And I’ve been experimenting with various writing styles, some very different than others.”

In hindsight, none of this stuff was a good idea. Nothing I did before about 2014 was a good idea. Don’t be like me.

Now listen to my advice on working for free.

 

Working for Free

I wanted to write this post a couple weeks ago when there was some Twitter debate about whether or not you should ever work for free, but I figured I’d just wait until everyone lost interest. Actually, I was just busy with some other stuff (including this sick DFS ownership dashboard at FantasyLabs), but I knew I wanted to chime in.

Darren Rovell initially started the conversation by tweeting that working for free is one of the best ways to get a job. “Fastest way to a job today is provide a team, a player, an agency, great work unsolicited and for free. It’s hard enough to get paid to work in sports. You have to prove value more than ever.”

A bunch of people had some pretty hot takes on the matter, ranging from “never do anything for free” to “spend hundreds of hours collecting data and then just give it away to the one potential buyer who needs it most.”

Matthew Berry, who I think has done a really phenomenal job of understanding the long game and the value of, well, providing value—he’s a fantasy sports analyst with nearly 1 million Twitter followers for fuck’s sake—commented on Rovell’s post:

 

 

I’ve gotten to know Matthew a bit over the past couple years, and one of the biggest things I’ve learned from him is to find success by helping people, not by trying to maximize short-term exposure. Just be authentic. A couple years ago—shortly after I first met him—we talked about fantasy football for an hour and he basically let me just ramble about my thoughts on uncertainty and projecting players probabilistically with a range of outcomes. Did he need to do that? I’m gonna go ahead and say no. He could probably charge someone lots of money to talk to him about fantasy football.

He has some really good career advice in this article, by the way, that’s relevant to this conversation and with which I agree almost across the board. In it, he talked about his path and working for free:

There are a ton of fantasy football websites out there. Offer to contribute to one of them for free. Just get your foot in the door. I know some people have started their own blogs and that’s certainly a way to go, but I prefer writing for someone else when starting out. Let someone else worry about traffic and the site and everything else. Just focus on honing your craft.

I prefer the personal blog route because I can say “for fuck’s sake” and be confident my editor—me—won’t remove it, but the idea is the same: develop skills—real, unique skills—demonstrate how you can help someone with those skills (however possible), then figure out how to make money from it.

This is sort of an aside, but in that same article, Matthew gave some other advice that really resonated with me:

Learn how to communicate in a variety of ways. I remember a famous agent once told me when I complained of writer’s block that, “Writers write. Period. Writers write.” You need to write and you need to hone your craft. The more you do it, the better you’ll be at it. You need to learn to be able to be comfortable in front of a microphone and a camera, be it radio, podcasting or video. When I was in Los Angeles, I took classes at the famous Groundlings Improv. Not to help my acting (there’s no help for that) but rather to get comfortable speaking and performing in front of an audience where I would have to think on my feet. The more platforms you are comfortable on, the better. Start a podcast. Do YouTube videos. You’re not worried about anybody watching or listening at this point, you just want reps.

Okay, I don’t agree with the whole thing. Improv classes? I get anxiety going to the grocery store. But the idea of communicating in different ways is something I really sucked at in the past and now I’m only moderately below-average. Really though, whether you work in media or not, your ideas are only as good as your ability to effectively communicate them. It’s on you, the communicator, to figure out the best way to do that with each specific audience. And they’re all different. Sometimes people say, “I only write for me.” Okay, then why is it online?

I’m rambling. Back to working for free…

 

Why Working for Free Can Be Smart

In typical I-need-to-finish-this-post-quickly fashion, I’m just going to sort of list some ideas/thoughts I have about free work and then hope by the end I can wrap it up in a way that makes you think it was all carefully planned.

 

Time

Maybe the crux of the scattered argument I’m about to propose is that the merits of working for free change based on your timeline. I’m a big believer in the long game. I think most people optimize for right now and it’s +EV simply to make decisions based on what’s most beneficial down the line.

Simple examples: reading, sleeping well, and working out. All stupid uses of time if your goal is to optimize your day, but all some of the most vital aspects of creating long-term happiness/wealth/well-being. If the question is “How can I extract maximum value out today?” you probably shouldn’t work out, for example. It sucks ass. I’ve tried it. Not fun. But if the question is “How can I create the most value for myself (happiness, money, however you want to define ‘value’) in, say, 2019, then you should probably create a long-term foundation for success, with reading, working out, and getting rest being among the most +EV things you could possibly do.

In many ways, this is what we’re trying to do at FantasyLabs. Not just in creating long-term customers by providing a foundation for solutions instead of one-off “answers,” but also in terms of the basic philosophy and structure of the company (which uses a “freemium” model).

At FantasyLabs, we give so much away for free. Almost all content is free. Most of the tools are free. I love free. Are we maximizing revenue right now? No. Our subscription is quite underpriced (in my opinion), even though it’s among the highest in DFS. We don’t try to squeeze money out of people to artificially inflate monthly revenue. We’d rather give away too much for free than too little because “too much” really doesn’t exist if you have “the longest view in the room,” as Sam Hinkie said.

Fundamentally, I think we’re all trying to strike a balance between maximizing money/value/happiness right now versus creating a sustainable foundation for long-term value generation. At one end, working for free makes no sense. At the other, you should work for free all the time because it provides value to the maximum number of people.

The optimal balance, then, is completely dependent on time—for when you’re trying to optimize.

 

An Entrepreneur’s Mindset

Do you know who works for free all the time? Entrepreneurs. Do you know who never works for free and gets paid for every hour they put in? Employees.

Being an employee can be great. You can typically work only during set hours, get weekends off, don’t need to worry about problems that arise outside your expertise, etc. But, when you work for someone else, you (mathematically, at least in an efficient market) must take less money than you’re worth. And usually, you don’t get to participate in the upside if you (and your company) do an awesome job.

To be clear, I’m talking about the typical mindset (and pay) of your average employee/entrepreneur; you can be an employee with an entrepreneur’s mindset, or vice versa. Some business owners are total shmucks and would be better off working for someone else. But many people are sharp enough to absolutely crush it on their own and just aren’t going out and doing it. Today, and tomorrow, more than ever, it’s easy to go get it for yourself.

The big idea, I think, is getting paid on the value you create for others instead of getting paid for your time. Getting paid for your time can’t really scale, right? You can only work so much. It’s very linear—work X, get paid Y, work 2X, get paid 2Y. That stinks.

Maybe it looks something like this:

 

When you start to think about the value you can generate for yourself—again it can be happiness, freedom, money, whatever you want—I think you sort of start to realize that getting paid for your time is -EV if you have awesome skills and can better people’s lives.

 

The Right People

The upside of free work extends only insofar as it can increase long-term value in your life, so it should be obvious the person/company for whom you’re doing work is pretty important in determining whether or not you should work for free. If the industry leader in your field asked you to work for free for a week to prove yourself and there was a specific plan in place to acquire upside if things went well, that would be a no-brainer decision for you, right? If some guy from Craigslist asked you to write articles to be published under his name, maybe not as much.

FantasyLabs now has somewhere around 15 full-time employees and a handful of contractors/part-time workers. Exactly zero of them sent me a resume and were handed a job based on their qualifications. All of them proved their value in such a way that it became obvious we needed them; they gave us no choice.

Sean emailed us and did all kinds of amazing SEO/email/design work for free for like a month; he’s now our Marketing Director.

Ian worked for me personally for years collecting data, editing my books, and doing a variety of other tasks completely for free. I told him I was unable to pay him much, if anything, which was true, and he kept at it because he had confidence it would pay off; we hired him full-time before NFL.

Justin did projections at Basketball Monster and had thus built up a portfolio of work of which the DFS community was already aware. He was hired about a month after we launched.

Jay, Bryan, and Bill were three of our original admins who started with Labs almost right after the site launched; they were hired full-time within a couple months. Bill actually emailed me late in the process—the “process” being I told people on Twitter to email me if they wanted a job explaining why they’d be good for it—and we had actually already settled on using only three admins. Bill sent an incredible email (and sample article), both of which were logically sound and so well-written. Clear writing is a sign of clear thinking, so we brought Bill on too just because I thought he rocked. He’s so valuable to FantasyLabs now it’s insane.

Colin emailed me identifying an inefficiency in our product and offering a solution that would help us make more money and improve the value of our site immensely; he now runs PGA and is basically a Labs data scientist.

J.J. just sent over his signed contract yesterday to become a full-time Labs employee after absolutely crushing over the past few months, going above and beyond and never once asking for anything or complaining about the workload.

Even Peter, my co-founder and one of my best friends, helped me with my books for years—for free—because he liked the vision and maybe understands the long-term value of generosity more than anyone. The key is he’s just a genuinely nice person and not someone leveraging “kindness” for personal gain; it’s pretty easy to tell the difference.

I’m leaving people out, but the idea is that no one is going to just hand you something. Frankly, no one is really going to give you a chance out of the goodness of their hearts. I get lots of emails asking for work, and I’d say maybe 98-99% of them are some variation of “I love sports, I won my fantasy league two years in a row, hire me.” The others are almost always some form of “I think you could improve what you’re doing in these ways, here’s how and why it will benefit you, here’s why I’m in a position to help, and I’ll do it all for free.” Then they over-deliver on that promise.

My books are a form of the power of free work. I earn royalties from the books, but it’s not like I’m making life-changing money selling $9 e-books on a niche subject. The books are effectively marketing vehicles, though; they’re basically like sending the best email of all time to everyone in my industry (and interesting, sharp people outside it) demonstrating my expertise. I’ve had so many amazing opportunities stem from the books. Last week, I met the producer of one of my favorite TV shows because he read my books and began playing DFS. Is that going to help me down the road? Who fucking cares? It was cool. Even FantasyLabs was created through my books; the founder of SportsInsights was planning to start a site similar to Labs and contacted me after reading one of my books. That one single relationship led to the formation of an incredible company, which can be traced back to me at one time deciding to write a book (without knowing if I’d make any money) for the hell of it.

But it all comes back to providing value to the right people, meaning you’re the person who identifies them, and not vice versa. If someone asks you to do work for free, that might not be the best opportunity; your job is to spot the situation that’s going to improve your upside the most long-term—likely with someone who isn’t even necessarily looking for help—and then convince them you can improve their life by actually doing it.

 

Trading in the Sure Thing

In a nutshell, I think working for free is a form of gambling, but in a smart way. It’s +EV risk taking. It’s trading in the sure thing for a lower chance of short-term success—but disproportionate rewards when things go your way.

As an example, I could put hours into some very direct form of work—writing content for money, for example—and get paid for the work I complete. Or I could send, say, 100 emails to entrepreneurs, business owners, investors, whoever—emails geared specifically toward them and how each one might be able to improve what they’re doing—and 98 of them could go ignored, one of them looks promising but wastes my time, but that final one leads to life-changing happiness. Almost always, I think, the value is in thinking long-term and in taking risks—smart risks.

I actually think this idea the source of the “he got lucky” phenomenon. Mark Cuban got lucky to start and sell a company at the perfect time. Tom Brady got lucky to get drafted by the right team and get a chance to play because of an injury. SaahilSud—perhaps the best DFS player in the world—got lucky to finish ahead of everyone else in that DFS tournament. And that one. And that one.

This is true. All these people were lucky, but they also were bound to be successful no matter what. Making lots and lots of sharp bets—including betting on yourself by developing value-generating skills and leveraging them to help others, even for free—leads to short-term luck and long-term guaranteed success. Saahil is indeed “lucky” when he finishes 1st instead of 5th, but he exposes himself to so many opportunities to get “lucky” that it’s not really luck governing his success.

It’s not smart to take risks for the sake of it, but it is when everyone else’s risk-averse mindset means all the upside is in taking chances. If each of my emails or books or other “free” work takes as long to write as one article for which I could get paid $100—and they each have just a 10% chance of response—then anything above a $1,000 expectation from those responses would lead to more money. And that’s just right now. Two years from now, those articles pay you nothing. Meanwhile, those connections, my books, that free work are all paying dividends—exponentially increasing dividends. Look for the opportunities that pay off well into the future.

If you’re reading all this and saying “But I don’t have time to work for free,” yes you do. If you want something bad enough, you have time to do it. It’s always interesting to hear people say their dream is to do X, but almost always, they aren’t doing it. “I’m passionate about singing.” So why aren’t you singing? If you don’t have enough time (or opportunities, or contacts, or money), you probably aren’t really passionate about it. Passionate people don’t make excuses. They control their lives.

tl;dr The longer your view, the less concerned you should be with getting paid for your work and the more you should try to just help as many people as possible. Invest in yourself. Read books. Become an expert. Take chances.

And if none of that works, I have a cool little content business I’m starting if you’re interested in writing some articles for me.